Oil Refineries Announces Implementation of new Efficiency Measures and Update on Possibility for a Full Merger

Oil Refineries Announces Implementation of new Efficiency Measures and Update
on Possibility for a Full Merger
PR Newswire
HAIFA, Israel, January 2, 2013
HAIFA, Israel, January 2, 2013 /PRNewswire/ --
Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter " the C ompany, " " ORL "
) , Israel's largest integrated refining and petrochemical group, announced
yesterday:
1. As part of the Company's work plan and 2013 budget, as discussed by the
Board of Directors, the Company will implement efficiency measures,
improvements and savings in various fields of activity in light of, among
others, the current market situation, globally and in Israel.
2. A) In this context, the Company's Chairman and Vice Chairman announced
their initiative and decision to give up 10% of the management fees to which
they are entitled, for the year 2013. Likewise, the Company's remaining
directors (including external directors), also announced their initiative and
decision to give up 10% of the remuneration to which they are entitled, for
the year 2013.
B) In addition, the Company's CEO and other members of the Company's
management also announced their initiative and decision to give up 10% of the
salary to which they are entitled (with the exception for the provisions and
benefits), for the year 2013.
At the end of 2013, the management fees, remuneration of directors and
managers' salaries, will automatically revert back to their level had there
not been a reduction.
3. As part of the discussion of the Company's work plan and 2013 budget, the
Board decided to approve an early retirement plan for dozens of the Company's
employees, during the year 2013.
In addition, the Company announced that pursuant to the Company's announcement
of September 5, 2012 concerning the Company's Board of Directors' instructions
to assess a full merger between the Company and its wholly-owned subsidiaries,
including Carmel Olefins Ltd ("CAOL"), and on account of the complexity of
implementation of the said full merger, the Company's Board has directed
management to assess taking the required steps to take over CAOL's debts to
its financing banks and to its debenture holders. To that extent, the Company
intends to contact immediately the Company's and CAOL's banks and debenture
holders to obtain their agreement to the said procedure, including their
agreement to draw up a single set of financial criteria for all the
aforementioned creditors that shall be based upon the consolidated data of the
company. Taking over CAOL's debts by the Company, as stated, will allow the
Company to enjoy most of the benefits of a full merger between the companies
within a relatively short time frame.
In addition to the above, CAOL has received from those banks providing it with
credit their agreement to extend the validity period of the relief measures in
the waivers provided to CAOL in the past by said banks, according to the terms
as stated by CAOL in its announcement of today's date. As part of these
letters of agreement, CAOL has undertaken to provide the banks with a
guarantee from the Company or other security satisfactory to the banks in
respect to CAOL's commitments to them, not later than April 15, 2013. The
Company estimates that the process of taking over CAOL's debts by the Company,
as described above, might be complete before the aforementioned date, and
therefore the provision of a guarantee will become superfluous. In the event
that the process of taking over the debts is not completed by that date, the
Company sees the provision of the said guarantee as an intermediary stage in
the overall program to take over CAOL's debts as stipulated above.
The above - in respect to the Company's assessment concerning the process
whereby the Company takes over the debts of CAOL from its creditors,
formulating financial criteria based upon the consolidated company, and timing
of the above process - are forward looking statements, based inter alia on the
Company's plans and assessments, and are dependent, inter alia, on the
agreement of CAOL's and the Company's financing bodies. Accordingly, there
can be no certainty in respect to the completion of the aforementioned process
and its timing.
About Oil Refineries Ltd.
Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa,
operates Israel's largest integrated refining and petrochemical group. It is
one of the leading refineries in the Eastern Mediterranean area and
integrates, on-site, petrochemical businesses. ORL runs sophisticated and
state-of-the-art industrial facilities with a refining capacity of 9.8 million
tons of crude oil per year and a Nelson Complexity Index of 7.4, providing a
variety of quality products used in industrial operation, transportation,
private consumption, agriculture and infrastructure. Besides production of
fuels, the company produces in its wholly owned subsidiaries Polymers (through
Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd),
and Lube-Oils (through Haifa Basic Oils Ltd). The Company's shares are listed
on the Tel Aviv Stock Exchange under the ticker ORL. For additional
information please visit http://www.orl.co.il .
ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical
Enterprises Ltd., both public companies whose shares are traded on the Tel
Aviv Stock Exchange.
The above noted in this release includes forward-looking statements based on
Company data, as well as Company plans and estimations based on this data. The
activity, results and other data may be substantially different in reality
given uncertainty and various risks, including those discussed under risk
factors in the Company's financial statements and Director's report
Company Contact: Rony Solonicof Chief Economist and Head of Investor Relations
Tel. +972-4-878-8152 Contact IREn@orl.co.il Investor Relations Contact: Ehud
Helft / Porat Saar CCG Israel Tel. (US) +1-646-233-2161 / (Int.)
+972-52-776-3687 info@ccgisrael.com